How Nordstrom Is Using Service to Fuel the Hot Beauty Biz

As competition for the prestige beauty shopper grows more fierce, Nordstrom is aiming to kill its competitors with kindness — or rather, service.

Facing an increasingly discerning set of consumers who can find prestige beauty in myriad retailers, the 120-year-old department store is differentiating by predicting customers’ needs with data, and meeting them on every channel. It seems to be working: On an earnings call for the first quarter of 2021, the company’s beauty business was cited as a continual high performer.

Hoping to be a one-stop shop for its customers, Nordstrom has expanded its services in recent years. Last month, it unveiled body treatments from Cowshed, injectables by Dr. Dennis Gross and facials by HydraFacial at its New York flagship. Gemma Lionello, who served as the EVP and GMM of beauty and accessories at Nordstrom until August, said all departments stand to benefit from beauty’s growth.

“Strategically, it’s a trip driver,” Lionello said, adding that there were over 30,000 appointments in the beauty department alone during Nordstrom’s Anniversary Sale. “We are constantly driving trips by building that trust with our customers, and relationship-based selling. It’s strategically important for Nordstrom because of that trip aspect and the replenishment aspect of the category.”

Customer service may be central to Nordstrom’s value proposition, but Lionello said keeping in step with consumer demands requires constant evolution.

“When I started my career at Nordstrom, we were truly analog-only,” Lionello said, who joined the retailer in 1988. “Service meant taking care of the customer face-to-face and being very high touch. Now, the experience and the expectations are different. A customer wants to shop online, wants to shop at midnight, and learn more. When they want to make a trip in-store, they want that ease of experience and to be inspired in our stores. That bar is very high.”

Amping up Nordstrom’s digital capabilities across the department has been integral to its success. “Being ‘digital first’ means several things. Really, it means leveraging data to inform our product strategy,” Lionello said. “The second is optimizing our flow of inventory, how do we make sure that we have our products at the right place at the right time so we don’t disappoint our customers.”

Nordstrom’s beauty customer is channel-agnostic, Lionello said, so offering more bespoke beauty services in-person was imperative to differentiating from the online business. “We are not ever wanting to or trying to push our customers to a certain channel,” she said. “Our intent and ambition is to have this great connectivity from our digital store, and offer service, experience and convenience to our physical store, where the customer may want to connect with a salesperson, experience an event or enjoy a cocktail.”

Driving discovery of new products is also essential. Case in point, in August, Nordstrom inaugurated the Center Stage discovery hub in its New York flagship with a partnership with Valentino Beauty. “It’s important for us to have that sense of discovery and introduce new categories. But they also need to be able to find the trusted products that they replenish every month,” Lionello said.

Key categories the retailer is eyeing follow broader industry trends, such as wellness, sustainability and inclusive beauty. “We leverage data from how our customers are searching, and we needed to give a broader offer. They want to buy products without certain ingredients, then expanding into wellness, and more recently, sexual wellness,” Lionello said.

Devices across hair and face have also become more indispensable to Nordstrom’s offering, Lionello said, as well as collection fragrances. Color cosmetics are back on the upswing.
Finding the sweet spot between tightly edited assortments and a breadth of offerings was key to modernizing the brand matrix. “We put everything through the filter of our customer,” she said. “We don’t want to add brands or categories for the sake of newness, we want to make sure that it’s right for our customer, and that it is in line with their expectations and meets their values.”

To meet customers’ growing consciousness, Nordstrom signed the 15 Percent Pledge earlier this year. Lionello started focusing on inclusive beauty in late 2019. “The Black-owned brands that we launched in beauty are being received well by our customers. Brands like Uoma Beauty, Briogeo, Bomba Curls, BeautyStat and so on,” she said. “There are so many different touch points to be more inclusive and to meet our customers’ values, but it’s certainly an ever-evolving journey for us.”

Last year, Nordstrom also introduced its partnership with TerraCycle called BeautyCycle, which aims to recycle 100 tons of beauty packaging by 2025.

As themes like inclusivity and sustainability become table stakes for Gen Z, the biggest and most educated crop of beauty consumers, Lionello expected Nordstrom’s ethos to be as resonant as ever. “In the way that Gen Z learn and get their information from a trusted influencer or friend, they are wanting to shop with somebody they trust and a retailer that is aligned with their values. Hopefully, that’s Nordstrom,” she said.

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